Tag Archives: Fair Lending

The U.S. Department of Housing and Urban Development announced that it will “shortly” seek public comment on whether its controversial disparate impact rule is consistent with the Supreme Court’s Inclusive Communities decision. In Inclusive Communities, the Supreme Court held that disparate impact is a cognizable theory of discrimination under the Fair Housing Act. Thus, a defendant may be… Read More

On December 14, 2017, the Department of Defense published final interpretive rules (the “2017 Interpretive Rule”) amending previously issued interpretive rules on the Military Lending Act. The 2017 Interpretive Rule amends and replaces three specific questions and answers in the interpretive rules issued by the DOD in August 2016, while also adding a new question…. Read More

The CFPB recently announced the issuance of its first no-action letter (“NAL”) to Upstart Network, Inc., an online lending platform that uses alternative data to model consumer credit decisioning and pricing. The letter signifies that the CFPB has no present intention to recommend an enforcement or supervisory action against Upstart for violation of the Equal… Read More

On August 23, 2017, the CFPB announced the resolution of an administrative action under the Equal Credit Opportunity Act and its implementing regulation, Regulation B, against American Express Centurion Bank and American Express Bank, FSB. In the proceeding, the CFPB alleged the Issuers violated ECOA by (i) offering credit and charge card products and services to… Read More

On February 16, 2017, the CFPB issued a Request for Information regarding use of alternative data and modeling techniques in the consumer lending “credit process.” The CFPB defines the “credit process” broadly as all processes and decisions made by a creditor during the full life cycle of the credit product, including marketing, pre-screening, fraud prevention,… Read More

Hope you survived all of those awkward Thanksgiving holiday conversations—amazing how divided people are on whether the court got it right in the PHH case, isn’t it? So on we go into the holiday season, while visions of Dodd-Frank repeal dance in our heads. No long winter’s nap for the CFPB, not with the inauguration… Read More

Given the outcome of the presidential election, the focus is now on President-Elect Trump’s campaign promises to scale back the Dodd-Frank Act and pursue deregulation of financial services. As of now, little is known about specific actions the new administration will pursue after inauguration. There is, however, a template for reform, namely, the Financial Creating… Read More

Richard Cordray, director of the CFPB, issued a letter dated August 30, 2016 (“Cordray Letter”), expressing the CFPB’s views on whether credit discrimination on the basis of gender identity and sexual orientation violates the Equal Credit Opportunity Act (ECOA) and Regulation B. The Cordray Letter was issued in response to an inquiry from Services &… Read More

On August 26, 2016, the DOD issued an interpretive rule (the “Interpretive Rule”) providing guidance on the DOD’s regulations implementing the Military Lending Act. That same day, we published a high-level summary of the Interpretive Rule, noting that the Interpretive Rule aims to clarify certain ambiguities in the DOD’s July 2015 final rule. In this… Read More

In August 2016, the CFPB, the OCC, and the Board of Governors of the Federal Reserve System (together, the “Agencies”) jointly published in the Federal Register a notice of proposed rulemaking (NPR) to amend the Agencies’ respective regulations exempting certain small loans from the special appraisal requirements that apply to lenders in connection with making… Read More

On August 2, 2016, the CFPB published a new guidance document titled CFPB’s Principles for the Future of Loss Mitigation (the “Guidance”), which outlines a recommended framework for new, industry-driven foreclosure relief programs. The Guidance largely follows the July 25, 2016, white paper jointly issued by the U.S. Department of the Treasury (“Treasury”), the U.S…. Read More

On August 26, 2016, the Department of Defense (DOD) issued an interpretive rule providing guidance on the DOD’s regulations implementing the Military Lending Act (MLA). Specifically, the interpretive rule aims to clarify certain ambiguities in the DOD’s July 2015 final rule, which significantly expanded the scope of the MLA to cover new types of creditors… Read More

On July 29, 2016, the board of directors of the Federal Deposit Insurance Corporation (FDIC) released a proposal regarding third-party lending guidance (“Proposed Guidance”) as part of a package of materials designed to “improve the transparency and clarity of the FDIC’s supervisory policies and practices.” The Proposed Guidance elaborates on previously issued agency guidance on managing third-party risks and,… Read More

CFPB “mystery shoppers,” along with secret recordings, were part of the CFPB’s factual allegations in a recent mortgage discrimination settlement. The DOJ and CFPB announced a settlement with BancorpSouth Bank to resolve alleged violations of the Fair Housing Act and Equal Credit Opportunity Act (ECOA). The complaint alleges that from at least 2011 to 2013,… Read More

Recent initiatives by the CFPB to dramatically expand its regulation of small business lending present a confluence of concerns to industry participants. These initiatives include the CFPB’s extension of fair lending rules to types of credit not ordinarily considered to be subject to the agency’s jurisdiction. The CFPB’s focus on business lending likely will have… Read More

On May 10, 2016, the U.S. Department of the Treasury (“Treasury”) issued a white paper, entitled “Opportunities and Challenges in Online Marketplace Lending” (“White Paper”). The White Paper describes Treasury’s review of online marketplace lending and provides Treasury’s recommendations to the private sector and the federal government on how to encourage “safe growth” in the… Read More

Of Counsel Leonard Chanin will speak on the American Bankers Association’s “Military Lending Act: A Regulation for All Banks” webinar. This webinar will focus on: The meaning of the all-in “military” APR Other terms that are prohibited in covered loans The types of loans covered How and where to identify covered borrowers How to provide… Read More

On March 22, 2016, the Supreme Court of the United States issued an order in Hawkins v. Community Bank of Raymore. An evenly divided Court affirmed without issuing an opinion, thereby resolving the Hawkins case but leaving open the proper interpretation of the Equal Credit Opportunity Act (ECOA), failing to resolve a circuit split between… Read More

The U.S. House of Representatives passed legislation on November 18, 2015, that would revoke the CFPB’s guidance on indirect auto lending and expand the qualified mortgage rule’s safe harbor. The Reforming CFPB Indirect Auto Financing Guidance Act, H.R. 1737, “[d]eclares without force or effect” the CFPB’s Bulletin 2013-02 (Indirect Auto Lending and Compliance with the… Read More

In June 2013, Morrison & Foerster published the client alert “CFPB Fair Lending Guidance for Indirect Auto Lenders—It’s Not Just About Cars.” Summary: Several weeks ago, the CFPB issued a fair lending guidance bulletin (“Bulletin”) directed at financial institutions that make indirect automobile loans. While the Bulletin thus far has not attracted widespread public attention,… Read More

On September 24, 2015, the CFPB and DOJ announced a joint action against Hudson City Savings Bank for allegedly discriminatory redlining practices from 2009 through 2013 in certain neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania in violation of the Equal Credit Opportunity Act and the Fair Housing Act. Over the past few months,… Read More

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